08/22/2024 | News release | Distributed by Public on 08/22/2024 12:35
Published: August 22, 2024
Every time I work with a new brand, my first order of business is to conduct a competitive analysis.
A competitive analysis report helps me understand the brand's position in the market, map competitors' strengths/weaknesses, and discover growth opportunities.
In this article, I'll break down the exact steps I follow to conduct competitor analysis and identify ways to one-up top brands in the market.
We'll cover:
Competitive analysis is the process of comparing your competitors against your brand to understand their core differentiators, strengths, and weaknesses. It's an in-depth breakdown of each competitor's market position, sales & marketing tactics, growth strategy, and other business-critical aspects to see what they're doing right and find opportunities for your business.
Competitive analysis gives you a clearer picture of the market landscape to make informed decisions for your growth.
That said, you have to remember that competitive analysis is an opportunity to learn from others. It isn't:
Let's look at how this exercise can help your business before breaking down my 5-step competitive analysis framework.
If you're on the fence about investing time and effort in analyzing your competitors, know that it gives you a complete picture of the market and where you stand in it.
Here are four main reasons why I perform a competitive analysis exercise whenever working with a brand for the first time:
The bottom line: Whether you're starting a new business or revamping an existing one, a competitive analysis eliminates guesswork and gives you concrete information to build your business strategy.
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Competitive market research is a vital exercise that goes beyond merely comparing products or services. It involves an in-depth analysis of the market metrics that distinguish your offerings from those of your competitors.
A thorough market research doesn't just highlight these differences but leverages them, laying a solid foundation for a sales and marketing strategy that truly differentiates your business in a bustling market.
In the next section, we'll explore the nuts and bolts of conducting a detailed competitive analysis tailored to your brand.
Before we walk through our step-by-step process for conducting competitor analysis, let's look at the main aspects to include for every competitor:
Now, it's time to learn how to conduct a competitive analysis with an example to contextualize each step.
Every brand can benefit from regular competitor analysis. By performing a competitor analysis, you'll be able to:
As you can see, learning any of these four components will lead your brand down the path of achievement.
Next, let's dive into some steps you can take to conduct a comprehensive competitive analysis.
As a content marketer, I've performed a competitive analysis for several brands to improve their messaging, plan their marketing strategy, and explore new channels. Here are the five steps I follow to analyze competitors.
The first step is a simple yet strategic one. You have to identify all possible competitors in your industry, even the lesser-known ones. The goal here is to be aware of all the players in the market instead of arbitrarily choosing to ignore a few.
As you find more and more competitors, categorize them into these buckets:
Here's a competitive matrix classifying brands in the community and housing space:
To help you understand each step clearly, we'll use the example of Trello and create a competitor analysis report using these steps.
Here's a table of the main competitors for Trello:
able of the main competitors for Trello:
Type of competitors |
Competitor names |
Direct competitors |
Asana, Basecamp, Monday.com, MeisterTask |
Indirect competitors |
Slack, Notion, Coda |
Legacy competitors |
Microsoft Project, Jira |
Disruptor competitors |
ClickUp, Airtable |
Once you know all your competitors, start analyzing their position in the market. This step will help you understand where you currently stand in terms of market share and customer satisfaction. It'll also reveal the big guns in your industry - the leading competitors to prioritize in your analysis report.
Plus, visualizing the market landscape will tell you what's missing in the current state. You can find gaps and opportunities for your brand to thrive even in a saturated market.
To map competitors' market positions, create a graph with two factors: market presence (Y-axis) and customer satisfaction (X-axis). Then, place competitors in each of these quadrants:
This visualization will tell you exactly how crowded the market is. But it'll also highlight ways to gain momentum and compete with existing brands.
5 Research and Planning Templates + a Free Guide on How to Use Them in Your Market Research
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Here's a market landscape grid by G2 documenting all of Trello's competitors in the project management space. For a leading brand like Trello, the goal would be to look at top brands in two quadrants: "Leaders" and "High Performers."
Step 2 will narrow down your focus from dozens of competitors to the few most important ones to target. Now, it's time to examine each competitor thoroughly and prepare a benchmarking report.
Remember that this exercise isn't meant to find shortcomings in every competitor. You have to objectively determine both the good and bad aspects of each brand.
Here are the core factors to consider when benchmarking competitors:
This benchmarking exercise will involve a combination of primary and secondary research. Invest enough time in this step to ensure that your competitive analysis is completely airtight.
Check out this example of a competitor benchmarking report for workforce intelligence tools:
Here's how I benchmarked Asana based on these criteria using the information I could find:
Criteria |
Asana |
Quality |
|
Price |
Offers a free tier and paid plans starting from $10.99/month per user. Advanced features and integrations are available at higher price points. |
Customer Service |
|
Brand Reputation |
Considered one of the best project management tools, with a slightly more robust feature set compared to competitors. |
While the first few steps will tell you what you can improve in your core product or service, you also need to find how competitors market their products.
You need to deep-dive into their marketing strategies to learn how they approach buyers. I analyze every marketing channel, then note my observations on how they speak to their audience and highlight their brand personality.
Here are a few key marketing channels to explore:
You can create a detailed document capturing every detail of a competitor's marketing strategy. This will give you the right direction to plan your marketing efforts.
The final step in a competitive analysis exercise is creating a SWOT analysis matrix for each company. This means you'll take note of your competitor's strengths, weaknesses, opportunities, and threats. Think of it as the final step to consolidate all your research and answer these questions:
You can use tools like Miro to visualize this data. Once you visually present this data, you'll get a clearer idea of where you can outgrow each competitor.
Here's a SWOT analysis matrix I created for Asana as a competitor of Trello:
To run a complete and effective competitive analysis, use these ten templates, which range in purpose from sales to marketing to product strategy.
First, you'll need to figure out who you're competing with to compare the data accurately. What works in a business like yours may not work for your brand. Divide your "competitors" into two categories: direct and indirect.
Keep these brands on your radar since they could shift positions at any time and cross over into the direct competitor zone. Using our example, Stitch Fix could start a workout line, which would certainly change things for Fabletics.
This is also one of the reasons why you'll want to routinely run a competitor analysis. The market can and will shift at any time, and if you're not constantly scoping it out, you won't be aware of these changes until it's too late.
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You'll want to analyze your competitor's complete product line and the quality of the products or services they're offering. You should also take note of their pricing and any discounts they're offering customers.
Some questions to consider include:
Running a sales analysis of your competitors can be a bit tricky.
You'll want to track down the answers to questions such as:
These helpful pieces of information will give you an idea of how competitive the sales process is and what information you need to prepare your sales reps with to compete during the final buy stage.
For publicly held companies, you can find annual reports online, but you'll have to do some sleuthing to find this info from privately owned businesses.
You could find some of this information by searching through your CRM and reaching out to those customers who mentioned they were considering your competitor.
Find out what made them choose your product or service over others out there.
When a competitor is identified, have your sales team dive deeper by asking why they are considering switching to your product. If you've already lost the deal, be sure to follow up with the prospect to determine why you lost to your competitor.
There are a few major factors that go into correctly pricing your product - and one major one is understanding how much your competitors are charging for a similar product or service.
If you feel your product offers superior features compared to those of a competitor, you might consider making your product or service more expensive than industry standards.
However, if you do that, you'll want to ensure your sales reps are ready to explain why your product is worth the additional cost.
Alternatively, perhaps you feel there's a gap in your industry for affordable products. If that's the case, you might aim to charge less than competitors and appeal to prospects who aren't looking to break the bank for a high-quality product.
Of course, other factors go into correctly pricing a product, but it's critical you stay on top of industry pricing to ensure you're pricing your product in a way that feels reasonable to prospects.
Additionally, take a look at any perks your competitors offer and how you might match those perks to compete. For instance, perhaps your competitors offer a major referral discount or a month-long free trial version.
These perks could be the reason you're losing customers, so if it feels reasonable for your brand, consider where you might match those perks - or provide some unique perks of your own if competitors don't offer any.
Did you know expensive shipping is the number one reason for cart abandonment?
Nowadays, free shipping is a major perk that can attract consumers to choose one brand over another. If you work in an industry where shipping is a major factor - like e-commerce - you'll want to take a look at competitors' shipping costs and ensure you're meeting (if not exceeding) those prices.
If most of your competitors offer free shipping, you'll want to look into the option for your own company. If free shipping isn't a practical option for your business, consider how you might differentiate in other ways - including loyalty programs, holiday discounts, or giveaways on social media.
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Analyzing your competitor's website is the fastest way to gauge their marketing efforts. This is a great way to see how accessible and engaging their assets are, and if you can, try experimenting with A/B testing your landing pages or website as well. Take note of any of the following items and copy down the specific URL for future reference:
Then, take a look at the quantity of these items. Do they have several hundred blog posts or a small handful? Are there five white papers and just one e-book?
Next, determine the frequency of these content assets. Are they publishing something new each week or once a month? How often does a new e-book or case study come out?
Chances are, if you come across a robust archive of content, your competitor has been publishing regularly. Depending on the topics they're discussing, this content may help you hone in on their lead-generating strategies.
From there, you should move on to evaluating the quality of their content. After all, if the quality is lacking, it won't matter how often they post since their target audience won't find much value in it.
Choose a small handful of samples to review instead of tackling every single piece to make the process more manageable.
Your sampler should include content pieces covering a variety of topics, so you'll have a fairly complete picture of what your competitor shares with their target audience.
When analyzing your competitor's content, consider the following questions:
As you continue to scan the content, pay attention to the photos and imagery your competitors are using.
Do you quickly scroll past generic stock photos, or are you impressed by custom illustrations and images? If they're using stock photos, do they at least have overlays of text quotes or calls-to-action that are specific to their business?
If their photos are custom, are they sourced from outside graphic professionals, or do they appear to be done in-house?
When you have a solid understanding of your competitor's content marketing strategy, it's time to find out if it's truly working for them.
Understanding what types of technology your competitors use can be critical for helping your own company reduce friction and increase momentum within your organization.
For instance, perhaps you've seen positive reviews about a competitor's customer service - as you're conducting research, you learn the customer uses powerful customer service software you haven't been taking advantage of.
This information should arm you with the opportunity to outperform your competitors' processes.
To figure out which software your competitors use, type the company's URL into Built With, an effective tool for unveiling what technology your competitors' site runs on, along with third-party plugins ranging from analytics systems to CRMs.
Alternatively, you might consider looking at competitors' job listings, particularly for engineer or web developer roles. The job listing will likely mention which tools a candidate needs to be familiar with - a creative way to gain intel into the technology your competitors use.
To gauge how engaging your competitor's content is to their readers, you'll need to see how their target audience responds to what they're posting.
Check the average number of comments, shares, and likes on your competitor's content and find out if:
From engagement, you'll move right along to your competitor's content promotion strategy.
The following questions can also help you prioritize and focus on what to pay attention to:
The last area you'll want to evaluate when it comes to marketing is your competitor's social media presence and engagement rates.
How does your competition drive engagement with their brand through social media? Do you see social sharing buttons with each article? Does your competitor have links to their social media channels in the header, footer, or somewhere else? Are these clearly visible? Do they use calls-to-action with these buttons?
If your competitors are using a social network that you may not be on, it's worth learning more about how that platform may be able to help your business, too.
To determine if a new social media platform is worth your time, check your competitor's engagement rates on those sites. First, visit the following sites to see if your competition has an account on these platforms:
Then, take note of the following quantitative items from each platform:
With the same critical eye you used to gauge your competition's content marketing strategy, take a fine-toothed comb to analyze their social media strategy.
What kind of content are they posting? Are they more focused on driving people to landing pages, resulting in new leads? Or are they posting visual content to promote engagement and brand awareness?
How much of this content is original? Do they share curated content from other sources? Are these sources regular contributors? What is the overall tone of the content?
How does your competition interact with its followers? How frequently do their followers interact with their content?
After you collect this data, generate an overall grade for the quality of your competitor's content. This will help you compare the rest of your competitors using a similar grading scale.
As you evaluate each component in your competitor analysis (business, sales, and marketing), get into the habit of performing a simplified SWOT analysis at the same time.
This means you'll take note of your competitor's strengths, weaknesses, opportunities, and threats any time you assess an overall grade.
Some questions to get you started include:
You'll be able to compare their weaknesses against your strengths and vice versa. By doing this, you can better position your company, and you'll start to uncover areas for improvement within your own brand.
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Product analysis drills down to discover key differences and similarities in products that share the same general market.
If you have a competitor selling products in a similar market niche to your own - you want to ensure that you aren't losing market share to the competition.
Leveraging the example above, we can drill down and discover some of the key differentiators in product offerings.
The first step in any product analysis is to assess current pricing.
Nintendo offers three models of its Switch console: The smaller lite version is priced at $199, the standard version is $299, and the new OLED version is $349.
Sony, meanwhile, offers two versions of its PlayStation 5 console: The standard edition costs $499, and the digital version, which doesn't include a disc drive, is $399.
Next is a comparison of key features. In the case of our console example, this means comparing features like processing power, memory, and hard drive space.
Feature |
PS5 Standard |
Nintendo Switch |
Hard drive space |
825 GB |
32 GB |
RAM |
16 GB |
4 GB |
USB ports |
4 ports |
1 USB 3.0, 2 USB 2.0 |
Ethernet connection |
Gigabit |
None |
With basic features compared, it's time to dive deeper with differentiators. While a glance at the chart above seems to indicate that the PS5 is outperforming its competition, this data only tells part of the story.
Here's why: The big selling point of the standard and OLED Switch models is that they can be played as either handheld consoles or docked with a base station connected to a TV. What's more, this "switching" happens seamlessly, allowing players to play whenever, wherever.
The Playstation offering, meanwhile, has leaned into market-exclusive games that are only available on its system to help differentiate them from their competitors.
The last step in a competitive product analysis is looking for gaps in the market that could help your company get ahead.
When it comes to the console market, one potential opportunity gaining traction is the delivery of games via cloud-based services rather than physical hardware.
Companies like Nvidia and Google have already made inroads in this space, and if they can overcome issues with bandwidth and latency, it could change the market at scale.
How do you stack up against the competition? Where are you similar, and what sets you apart? This is the goal of competitive analysis.
By understanding where your brand and competitors overlap and diverge, you're better positioned to make strategic decisions that can help grow your brand.
Of course, it's one thing to understand the benefits of competitive analysis, and it's another to actually carry out an analysis that yields actionable results. Don't worry - we've got you covered with a quick example.
Let's take a look at popular gaming system companies Sony and Nintendo.
Sony's newest offering - the Playstation 5 - recently hit the market but has been plagued by supply shortages.
Nintendo's Switch console, meanwhile, has been around for several years but remains a consistent seller, especially among teens and children.
This scenario is familiar for many companies on both sides of the coin; some have introduced new products designed to compete with established market leaders, while others are looking to ensure that reliable sales don't fall.
Using some of the steps listed above, here's a quick competitive analysis example.
In our example, it's Sony vs Nintendo, but it's also worth considering Microsoft's Xbox, which occupies the same general market vertical.
This is critical for effective analysis; even if you're focused on specific competitors and how they compare, it's worth considering other similar market offerings.
PlayStation offers two PS5 versions, digital and standard, at different price points, while Nintendo offers three versions of its console.
Both companies also sell peripherals - for example, Sony sells virtual reality (VR) add-ons, while Nintendo sells gaming peripherals such as steering wheels, tennis rackets, and differing controller configurations.
3. Research your competitors' sales tactics and results.
When it comes to sales tactics and marketing, Sony and Nintendo have very different approaches.
In part thanks to the recent semiconductor shortage, Sony has driven up demand via scarcity - very low volumes of PS5 consoles remain available. Nintendo, meanwhile, has adopted a broader approach by targeting families as its primary customer base.
This effort is bolstered by the Switch Lite product line, which is smaller and less expensive, making it a popular choice for children.
The numbers tell the tale: Through September 2021, Nintendo sold 14.3 million consoles, while Sony sold 7.8 million.
Sony has the higher price point: Their standard PS5 sells for $499, while Nintendo's most expensive offering comes in at $349. Both offer robust digital marketplaces and the ability to easily download new games or services.
Here, the key differentiators are flexibility and fidelity. The Switch is flexible - users can dock it with their television and play it like a standard console or pick it up and take it anywhere as a handheld gaming system.
The PS5, meanwhile, has superior graphics hardware and processing power for gamers who want the highest-fidelity experience.
If you compare the marketing efforts of Nintendo and Sony, the difference is immediately apparent: Sony's ads feature realistic in-game footage and speak to the exclusive nature of their game titles.
The company has managed to secure deals with several high-profile game developers for exclusive access to new and existing IPs.
Nintendo, meanwhile, uses brightly lit ads showing happy families playing together or children using their smaller Switches while traveling.
Engagement helps drive sales and encourage repeat purchases.
While there are several ways to measure engagement, social media is one of the most straightforward: In general, more followers equates to more engagement and greater market impact.
When it comes to our example, Sony enjoys a significant lead over Nintendo: While the official Playstation Facebook page has 38 million followers, Nintendo has just 5 million.
Competitive analysis is complex, especially when you're assessing multiple companies and products simultaneously.
To help streamline the process, we've created 10 free templates that make it possible to see how you stack up against the competition - and what you can do to increase market share.
Let's break down our SWOT analysis template. Here's what it looks like:
Strengths. Identify your strengths. These may include specific pieces of intellectual property, products that are unique to the market, or a workforce that outperforms the competition.
Weaknesses. Here, it's worth considering potential issues around pricing, leadership, staff turnover, and new competitors in the market.
Opportunities. This part of the SWOT analysis can focus on new market niches, evolving consumer preferences, or new technologies being developed by your company.
Threats. These might include new taxes or regulations on existing products or an increasing number of similar products in the same market space that could negatively affect your overall share.
A competitive analysis framework is a structured approach used to evaluate potential competitors and understand their strengths, weaknesses, opportunities, and threats.
This framework serves as a guide for businesses to identify competitive advantages, understand market positioning, and inform strategic decisions.
Depending on the industry and the company's objectives, this framework might focus on areas like product features, market share, pricing, customer feedback, and more.
Conducting a thorough competitive analysis involves several steps:
The five key components of a competitive analysis include:
The 3 C's refer to a strategic model that considers three main factors when understanding the broader business environment:
Yes, SWOT analysis is a type of competitive analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It is a strategic planning tool used to identify and analyze these four elements of a business.
While a SWOT analysis can be focused internally on a company's own attributes, when used as a competitive analysis tool, it assesses a competitor's SWOT to understand where your business has advantages or might be vulnerable.
Before you accurately compare your competition, you need to establish a baseline. This also helps when it comes time to perform a SWOT analysis.
Take an objective look at your business, sales, and marketing reports through the same metrics you use to evaluate your competition. Record this information just like you would with a competitor and use this as your baseline to compare across the board.
Editor's Note: This post was originally published prior to July 2018 but has been updated for comprehensiveness.